Welcome to our first guest blog post! In this article, Darren Thomas, CEO and Founder of DoubleHelix Tracking Technologies, explains the difference between certification and verification.
Within the context of regulatory due diligence, the distinction between certification and verification is becoming increasingly crucial for those buying and selling forest and agricultural products. While the terms may seem interchangeable, there are important distinctions that could make the difference between trouble-free trading or expensive mistakes. Here are three key differences:
Certification tends to be granted to distinct entities along a supply chain that meet the requirements of a Standard. A trading company might be certified to trade in sustainable material, for example, by meeting a set of audit criteria covering such things as management systems and record-keeping requirements.
Verification is the act of verifying documents, data or other attributes to ascertain their authenticity or accuracy. If a consignment of coffee is claimed to be of the highest grade, you may undertake an inspection of the coffee to verify that claim before shipping. You may even want to verify the accuracy of a certification claim. What data would you check if you wanted to verify that coffee was really “Fairtrade”?
Certification is always done by a third-party, called a Certification Body (CB). If certification is requested by a company, a CB will assign a qualified auditor to visit the company to determine if the company meets the requirements of the desired certification.
On the other hand, verification can be done by the company itself, or by a third-party. Naturally, there is a greater risk of conflict of interest if verification checks are carried out by people too close to the product in question. For that reason, third-party verification provides greater assurance and credibility where that is desired.
When it comes to Due Diligence, certification may not meet the requirements of regulations, unless it is specified that a particular certification scheme is acceptable evidence of compliance with the legislation. For example, certification to the ISCC EU standard is an acceptable method to demonstrate compliance with Europe’s Renewable Energy Directive (RED II). But in many cases, certification does not provide the level of traceability or transparency required to comply.
The upcoming EU Deforestation Regulation (EUDR) does not refer to any specific certification schemes, because none alone offer the ability to independently verify the actual origin of certified products.
Conversely, it is possible to verify information within supply chains to determine if all aspects of a regulation are complied with, irrespective of whether the companies or products in the supply chain are certified or not.
It’s clear then, that the best use of certification, verification, or both approaches is dependent upon the market context and specific regulatory requirements that a product or market is subject to. Do not assume that certification meets all requirements of a regulated market. Whilst it may provide evidence of a higher standard and a valuable point of differentiation, additional verification measures may be required to demonstrate accurate and trustworthy documents and data that often underpin product claims.
Recently, we kicked off a two-year feasibility study with iov42 to create a “Due Diligence Management Platform” that accommodates any form of verifier and helps importers meet due diligence requirements brought about by new legislations – such as the EUDR. You can read more about it here.